OPINION OF VALUE
What is a “Realtor Opinion of Value” (ROV)?
As part of the real estate transaction process, the first thing that needs to get done is establish a sale value of a commercial property.
Property owners requiring an opinion of value, but who do not require a formal appraisal can use the service of a commercial real estate brokerage.
How is a “ROV” determined?
Three generally recognized methods can be applied to evaluate the property; the cost Approach, the Income Approach and the Direct Comparison Approach.
Value by the Cost approach is determined by adding the land value to the replacement cost of the improvement less depreciation. The Income Approach involves the capitalization of a property’s net income or “potential” net income at an appropriate market rate, into an indication of value. The Direct comparison is applied by comparing the subject property to similar properties that have sold recently or are on the market.
What information is included in a “ROV” ?
- Description of the property’s physical characteristics
- Description of the neighborhood in which the property is situated
- Historical and current market data
- Property photographs
- Sales comparables
- Comparable properties for sale
- Market valuation
- The realtor’s opinion of current market value